HBOS is expected to have to address rising concerns about whether it is over-exposed to Britain’s embattled housebuilding sector when it publishes its £4 billion rights issue prospectus later this week.

However, the Halifax/Bank of Scotland banking group received a boost yesterday when the UK Shareholders’ Association said it did not expect the bank to publish any writedowns on individual property assets it holds.

No “writedowns on individual property assets it holds?” Haven’t you been listening? HBOS has been hiding the write-downs on the balance sheet of all places. It is a matter of concern to some investors:

Roger Lawson, a director of UKSA, many of whose members are believed to be among HBOS’s two million private investors, said: “I think the concern is people are asked to subscribe in new shares and there is a risk of further (housebuilding] liabilities being disclosed.

A good point, Mr. Lawson, that the bank just can’t seem to get its head around.

“But there is another factor, I think, why you cannot necessarily read too much into HBOS’s rights issue from what is being said has happened at RBS.

“RBS has made a stronger case for the cash call. They were under-capitalised post the ABN Amro acquisition, they said sorry, and now they are trying to rectify it.

“But the HBOS cash call has never really been that wellexplained. They were not desperately short of capital and had not done a big takeover deal.

“The risk is that the reason for its rights was that they were simply terrified by a UK bad debt cycle developing.”

The risk is again that the losses and write-downs have been hidden and the certainty is that they will stand up to bite the hand that feeds them – the rights issue. Dilution is not the risk; a zero share price is. And when you compare apples to donuts, zero evens everything out.